Gold is trading at 1616.05. Most of the trading day was fairly quiet as predicted with little eco news in Europe and little political drama. Gold was trading fairly flat until the US eco releases dashed hopes generated earlier this week. With the exception of building permits which reported higher then expected, unemployment, housing starts and manufacturing all reported well below forecast, once again turning investors to think of Fed stimulus.

Taking cues from yesterday’s upbeat Industrial production numbers from the U.S and optimistic comments by the Chinese premier Wen Jiabo, most of the commodities in traded initially with a mild positive bias but was seen reversing earlier gains on a weak Chinese FDI data. Spot gold and silver were seen marginally up, trading in narrow ranges. Taking sheen off gold today was the report by the World Gold Council which showed Gold imports by India, the world’s largest bullion buyer, falling 56 percent in the second quarter after record prices curtailed jewelry buyers and investors.

Gold demand fell to its lowest level in more than two years in the second quarter, the World Gold Council said, as drop in buying in major consumers India and China outweighed a record quarter for central bank purchases. Overall gold consumption fell 7% to 990 tonnes in the three months to June, its lowest quarterly level since the first three months of 2010.

Dollar index edged up, trading on a greener turf on U.S recovery sign optimism. Base Metal complex in LME was almost flat with Lead and Zinc falling more than 1 percent.

Earlier, Chinese foreign direct investment fell 8.7% in July to the weakest level in almost 2 years, suggesting weakening foreign confidence in the country’s economic prospects.

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